Chancery Awards PE Buyer Damages Over Founder's Earnout Conduct in Saama
In re Saama Technologies Litigation (Del. Ch., Sept. 26, 2026): a private equity affiliate that took control of Saama Technologies owes the company nothing on the earnout and won damages, per Fried Frank.
Per Fried Frank's client alert, in In re Saama Technologies Litigation (Del. Ch., Sept. 26, 2026) the Court of Chancery ruled for the buyer — an affiliate of a private equity firm that acquired a controlling stake in Saama Technologies — in a dispute over the founder's earnout, awarding the buyer damages rather than leaving the earnout obligation unpaid; the alert excerpt states the buyer "does not owe the Company" the sums in question. The truncated record available here does not confirm the size of the award, the precise standard applied to efforts covenants, or how each claim was disposed of.
Why sophisticated M&A counsel should care: earnout and efforts-covenant disputes are among the most common post-closing claims in controlling-stake transactions, and Delaware remains the default forum. A ruling crediting a buyer's aggressive post-closing approach — and permitting a buyer to recover against the seller — bears directly on how efforts clauses, milestone definitions, and related-party latitude are negotiated and later litigated.
Practical next steps: audit efforts and earnout language in pending deals for clarity on control-holder conduct, and watch for appeal or related Saama proceedings. Read the full opinion before relying on the holding.